It can be difficult to expand your business on limited funds. A good way to circumvent this problem is to opt for asset funding which is advantageous as it allows you to purchase the asset over time, rather than paying a larger sum upfront.

Find out how Asset Funding UK can help your business expand whether you need help financing a new van or something else, we have business finance options to suit every need.

What Is Asset Funding?

If you can’t yet afford to purchase a particular asset for your business then you’ll want to consider asset funding. This uses your company’s balance sheets, such as short-term investments and your inventory and accounts as collateral for a loan.

This collateral allows you to borrow the funds you need to purchase the assets you require, which is then paid back over a set number of months in installments. Traditionally, financial assets like these are more liquid-based than tangible assets like real estate and commodities.

What Are the Different Types of Asset Funding?

It’s also important to understand the different options available to you before making this decision. Here are some of the available options:

Hire purchase: This is where the business gains ownership and the legal title transfers upon completion of payments, including the purchase payment. You can also defer some of the cost with a balloon payment which is offset to the end of the agreement, based on the value of the asset.

Finance lease: This is a more flexible asset finance option that’s ideal for businesses looking to handle asset management. This option also comes with a balloon payment option based on the expected resale value of the asset, allowing you to pay more at a later date.

Operating lease: Operating leases allow you to rent the asset whilst you need it but it’s only for part of the asset’s life so you pay a reduced rental. The cost difference is between the purchase value and the resale value. This is a great option as you only need to pay for the asset as long as you need it and you don’t need to dispose of it or deal with any residual value issues.

How Does Asset Funding Help My Business?

If your company has room to grow, or sees a unique opportunity to expand, but simply lacks the necessary funds then asset funding is a great option for you. It allows you to expand at the rate you seek whilst keeping immediate costs down. Rather than forking out large portions of cash, which leaves your accounts dry, you can spread this payment over your desired period of time. Plus, there is a range of options available based on your needs.

It’s important to note, however, that the maintenance and upkeep of the assets you buy with the loan is your sole responsibility.

At Asset Funding UK, we can finance more than vans. Regardless of the asset you’re aiming to acquire, we can help you to expand your business and pay for this over a series of more manageable installments. Get in touch by calling us on 0117 428 7721 for more information!